The fountain of protection knowledge, Ronnie Martin , of Adalta Consulting tells Angela Faherty why the market needs a radical shake up
If a year is a long time in politics, then 30 years in the protection market is almost certainly a lifetime. But for Ronnie Martin, it has been time well spent.
With an employment history spanning more than three decades, Martin has held a number of managerial sales and marketing roles in the protection sector. He has worked for key players such as Royal & SunAlliance and Legal & General, and has experience across the protection market as a whole.
Perhaps a key role in Martin's extensive career was as personnel manager at Sun Alliance – a move he considers vital in helping to broaden his knowledge of the needs of employees.
"I wanted to get a good broad base of all aspects of management experience and moving into HR seemed like a very good way to do this. It gave me that extra dimension when considering issues in protection because it involved the concerns people have with employment," he says.
Martin spent two years working in personnel management before returning to the protection market fully armed with the concerns surrounding the wellbeing of employees. He believes his short stint in HR contributed to the way he views the protection market today.
'Most employees' awareness levels of what benefit entitlements they have are staggeringly low. As an industry we tend to treat protection as a fairly simple type of insurance and we make assumptions about people's understanding that are off the mark. This is a big problem," he says.
Martin's last role under the banner of an insurance company was as protection event director with Legal & General. He spent four productive years with the provider, but the desire to be his own boss spurred him into establishing his own business, Adalta Consulting, in June 2004.
It is still early days and work is trickling in, but Martin's laid-back approach means he is happy to take it all in his stride.
Sustainability
"I am still at the stage of establishing the business. It takes quite a while to talk to organisations and begin to get assignments. I am not knee deep in work, but that is a good thing as it allows me to get established and learn how to work alone. Trying to work with too many people too soon is not the way to build a business," he says.
The biggest challenge with the business, says Martin, is working alone. "You miss work colleagues and the whole office camaraderie and the ability to bounce ideas off each other. But that is part of the challenge, it means you operate differently."
Martin's extensive knowledge and expertise in the market means it won't be long before business picks up. An influential and revered figure in the protection market, Martin is well placed to work on a consultative basis with reinsurers, providers and IFAs alike. He has clearly outlined the different needs of market players and understands the importance of specialist knowledge.
"Different areas of the market are after different things, and that is something I cannot lose sight of. I understand that new providers to the market need advice on what their proposition should look like and what the key drivers are in the protection market at the moment," he says.
Similarly, existing providers are always looking for ways in which they can develop and promote their position and product offering – an issue, says Martin, that needs to be addressed sooner rather than later.
Martin believes that certain products like critical illness and income protection are in desperate need of a rethink if the current problems facing sustainability and low sales are to change. Critical illness in particular has started to show signs of tremors over its future sustainability, and positioning it in a different way could help the product remain viable in the market.
"There are a lot of ways to address the critical illness issue, positioning it as indemnity cover rather than as a lump sum is one possibility. If a person's house burns down and is rebuilt after the fire, they don't own that house outright after the fire if they didn't own it outright before. So why should someone who has a heart attack suddenly own their house?"
Income protection is not without its problems either. "Income protection does not have a wide enough reach to customers. It is predominantly aimed at higher socio-economic groups, professionals and men. To widen the base of consumers it is accessible to, we need to look at radically altering the product and look at the way MPPI works. For as long as I can remember, income protection has been called the Cinderella product, with people saying this is the year it is going to take off. Well it isn't going to take off as it is."
Martin also believes that the market needs to re-evaluate the way it promotes products if it is to ever achieve the sales potential it so rightly deserves. Focusing on the aspirational desires of consumers is one way to address this he says.
"For too many years, the industry has been beating the drum in a threatening manner by highlighting the protection gap and quoting statistics of low take up. Protection is not attractive to people, and that is what the industry needs to think about when promoting the subject. It doesn't interest them. That is a strong message for us."
Martin adds that focusing on the way in which consumers make purchases is one way to tackle the problem. "The purchases people make today are far more aspirational than they were 20 or 30 years ago, when they were about safety, security and maintaining tradition. Nowadays, it is more like joining a club. We need to tap into that sort of thinking," he says.
Fundamental shift
He continues: "I really believe this aspirational issue is the key to moving the market forward because the climate lends itself to it. There has been a fundamental shift in how consumers make purchases and as an industry we need to move with that line of thinking. The next 12 months in the protection industry are crucial.
Martin adds that much of the growth in the protection market over the last few years has been fuelled by the housing market but that is showing signs of slowing down. It cannot be depended on to help future growth. "The housing market will always be a major source of business for the protection market but it cannot be the only one."
With Financial Services Authority regulation around the corner, Martin believes the decision to bring general insurance and protection under the same banner will go some way towards addressing the issues or increasing protection sales.
"Classifying the products under one concept is a positive thing for the sector. Why should life assurance be classified as being different from household insurance? It isn't in the mind of a consumer. To them, insurance is insurance and hopefully, grouping the product together in this way will raise awareness of the need for protection – but driving up sales will still be down to us. It is our duty to make it attractive to people and make it easy for them to understand."
With that in mind, Martin looks set for some interesting times ahead. It may be early days for Adalta Consulting, but with the protection market in need of a shake up it won't be long before someone, somewhere, comes knocking at Martin's door.
